Week 5 In Community of Property (August 24) PDF

Content of universal community of property ASSETS DEBTS Content of universal community of property DEBTS • Debts incurred before conclusion of the union • Debts incurred after conclusion of the union • Co-debtors 2 “Die de man ofte wijft trouwt, die trouwt ook de schulden” Joint debts Gen...

Content of universal community of property ASSETS DEBTS Content of universal community of property DEBTS • Debts incurred before conclusion of the union • Debts incurred after conclusion of the union • Co-debtors 2 “Die de man ofte wijft trouwt, die trouwt ook de schulden” Joint debts General rule: Joint debts can be recovered from separate estates or joint estate of the spouses (no particular order). Exception: • S 19 of MPA • Spouse held liable for a delictual debt • Specific order of recovery and • Provision for an adjustment at the division of joint estate. QUESTION X and Y are married in community of property. In 2021, X assaulted B and B successfully instituted an action for delictual damages in the amount of R100 000 against X. Since X had no separate estate, this debt was paid from the joint estate. In 2023 Y institutes an action for divorce against X. The joint estate is worth R800 000 at the time of divorce. Y is aggrieved by the fact that the value of joint estate, and consequently her share therein, was negatively affected by the wrongful, blameworthy conduct of X in 2021. Does Y have any right orf recourse against X? Advise her with reference to relevant authority and the applicable principles. Spouses’ capacity to act Concurrent administration Equal administration Joint administration Matrimonial Property Act 15. Powers of spouses (1) Subject to the provisions of subsections (2), (3) and (7), a spouse in a marriage in community of property may perform any juristic act with regard to the joint estate without the consent of the other spouse. Consent requirements only apply where both spouses are alive and are not applicable to executors of deceased estates – Kotze v Oosthuizen Consent requirements (a) Prior written attested consent (b) Written attested consent (c) Written consent (d) Oral or tacit consent (e) No consent Consent requirements (a) Prior, written attested consent • Transfer ownership of immovable property. • Register a mortgage bond over immovable property. • Signing as surety for debt of third party. Consent requirements (a) Prior, written attested consent - Ratification (consent after the fact) is not possible. - General consent not possible. - Exception: Ordinary course of profession, trade or business. Consent requirements (b) Written attested consent • Contract to sell immovable property • Credit agreements Consent requirements (b) Written attested consent - Ratification is possible. - General consent is not possible. - Exception: ordinary course of profession, trade or business. Consent requirements (c) Written consent • Selling shares • Other assets mainly held as an investment Consent requirements (c) Written consent - Ratification is possible. - General consent is possible. - Exception: ordinary course of profession. Consent requirements (d) Oral (informal) or tacit consent • Selling furniture or other effects of the common household. • Receipt of money due to other spouse or joint estate. Donations: • Depends if donation will unreasonably prejudice the interest of the other spouse. - value of donation - financial and social standing of spouses - standard of living Questions to consider: What if the consent requirements are not complied with? What is the effect on the validity of that transaction and how is the joint estate affected? Consent requirements ► MPA is silent on the consequences. ► ABSA v Lydenburg Passenger Services - act contrary to consent the act is void ► Result: If asset transferred it can be reclaimed ► BUT: See protection of 3rd parties (s 15(9)(b) of MPA) Protective measures ► Section 15(9)(a) of the Matrimonial Property Act: Protection for a bona fide third party - spouse enters into transaction with third part contrary to consent requirements - third party does not know and cannot reasonably know that transaction is contrary to consent requirements - transaction is deemed to have been entered into with required consent. Protective measures ► Section 15(9)(b) of the Matrimonial Property Act: Protection for spouse whose consent was required - spouse who enters into transaction knows or ought reasonably to know that he will probably not obtain consent required from other spouse - and joint estate suffers a loss as result of the transaction - an adjustment must be effected in favour of the other spouse upon division of the joint estate Protective measures ► Section 16(1) of the Matrimonial Property Act: Protection for spouse if consent is withheld unreasonably or cannot be obtained for a good reason ► Section 16(2) of the Matrimonial Property Act: Can suspend power definitely or indefinitely ► Section 20(1) of the Matrimonial Property Act: Division of the joint estate during existence of the marriage Spouses’ capacity to litigate General rule: Spouses need WRITTEN CONSENT Exceptions: • Separate estate; • Recovery of damages in case of a delict • Profession, business or trade • Institute matrimonial litigation • Children from a previous marriage What if the spouse does not have the necessary consent? Effect against third parties: • Cannot be challenged by third party for want of consent • Costs to be recovered from separate estate of spouse Termination of community of property ► Death ► Divorce ► An order for division in terms of s 20 ► A change in the matrimonial property system in terms of s 21. CLASS WORK X and Y are married in community of property. What type of consent does X need from Y for each of the actions below (you can assume all of the assets form part of the joint estate): a 1. X wants to sell his shares in Naspers 2. X wants to conclude a contract of sale for house which he bought prior to the conclusion of the marriage 3. X wants to sell his coin collection to the value of R75 000 4. X wants to donate a chest freezer to a charity organisation 5. X, after having concluded the contract of sale, now has to register the house in the new owner’s name EXERCISE Mr Mokoena, who is married in community of property, sells a painting that is primarily kept as an investment, without the required consent to Mr Sithole, who is unaware that Mr Mokoena is married in community of property.